Another music service, Milk, shuts down

Milk Music is a service provided by Samsung. Today they announced they are closing the service If you wonder why music services get shut down:

  1. The cost of running a service – it takes a team of engineers to run these things. It seems like it should be less but a) the catalogs from the music labels are poorly done, b) there are service and payment issues, c) you need to keep the UI fresh, and d) running servers is not as simple as it should be (ask Apple about iCloud if you are curious).
  2. The return rate is low – labels are still charging as if we are in the land of the album whereas the overall wholesale price of music has plummeted. This means you you either of very deep pockets (Apple) or VC money (Spotify) or are running this because you forgot to turn off the lights (Microsoft).
  3. There are too many “free” choices out there – YouTube is okay and kids like it, Spotify has a free version and many people like that. Apple’s service is bizarre and weird and poorly designed but hey, it comes with my iPhone! People will pay for music but it needs to be a good deal and right now the deal is suspect for most people.

We will see more services like this go under. Pandora is on the block for example. I wonder when the “white label” music provider will make a comeback. For every Tier 2 player out there (e.g. Samsung, Microsoft, Google even) that wants a service as “table stakes” doing a white label business that handles the music ingestion, service, subscription, and allows the front company to design the UX would make a lot of sense. Not a great ROI but enough to stay in business (ironically Microsoft bought such a company years ago and got out of that very business).